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Credit Cards: A Mother’s Advice

Credit cards are often seen as the great financial evil. Almost every week, you’ll hear some or other horror story about someone who blew all of the money they had and then went on to spend some more on seventeen credit cards, only to find themselves homeless or paying off a mountain of debt as a result.

But that doesn’t have to be your experience with credit cards if you learn how to be clever with your money.

I’m a single mother of three boys, and I’ve had a credit card for more than twenty years. We’re not rich, but we’re comfortable – and I’m not buried in a mountain of debt that I can’t handle. I’ve learned to manage my money, and I’ve learned how to use my credit card as an effective tool instead of a crutch.

Credit cards don’t have to be a burden on you or your family. In fact, they can be used to work for you – and they’re a big help when they’re used right.

Here’s my best advice for using your credit card, and how you can save more than $1, 000 per year by making use of your rewards credit card in the right way.

All That Glitters

You’ve heard that expression that all that glitters isn’t necessarily gold – and this is absolutely true when you’re weighing up your credit card options. These days, there’s an offer for a new, improved credit card right around the corner, but whether you should accept it or not is the real question.

Many of the credit card options that you’re offered are only there to entice you, and a lot of their “special offers” will disappear once you’ve signed up – ensure that you only give your personal information to a card company with a solid reputation and proven benefits.

Reviews are easy enough to look up these days if you’re looking for a new credit card to apply for.

Never go for the first credit card that you see advertised to you. If I did this myself, I’d have been broke in my twenties already – and I would’ve racked up a whole series of credit cards and maxed out the lot of them. But I didn’t. I chose a few select credit cards with the right benefits and kept those for the long haul.

When someone offers you a new credit card (or you’re looking around for one), the first thing that you should do is go online (a luxury that we have now!) and take a proper look at what the card offers and what other people have thought of it.

What Is It Good For?

Most people think of a credit card as a way to pay for things when they don’t have money. After all, they have a good idea when their next check is coming in – and they can just pay that money directly into their credit card. That’s even, right?

Wrong. That’s the single biggest mistake that credit card owners make: Misunderstanding the use of their credit card.

You should be using your credit card for the benefits.

Every credit card has benefits, and these benefits are usually in the form of points or discounts that you get for using your credit card in the first place. These benefits are part of why I’ve been able to use my credit card to work for me instead of seeing it as The Enemy.

For example, there are many stores that will have an agreement with the credit card company – say, 10% off (or some added points) if you swipe your card at that store. This can rack up to big points over time, especially if you choose a card that has this type of agreement with stores you shop at anyway.

Selecting the Right Card for Your Needs

It’s essential that you use your credit card the right way from the start. This is how I’ve been able to save myself from getting trapped in debt over the years.

First, ensure that you’ve selected the right card. Every credit card is different, and every rewards card will have a different set of rewards. Read the fine print, look at the interest rate, make sure you’re comfortable with what the terms and conditions of the card says – and if there’s anything that you don’t understand on the contract, ask.

Look at the real benefits instead of what the salesperson or ad might be trying to tell you. Ask questions, dig, find the right card instead of setting for second best when the right credit card that could save you thousands is right around the corner.

Using Your Card to Save

You can use your card to save thousands in the long run. This seems like an impossible goal to most people, but I can tell you that it’s not. You can save as much as $1, 000 per year just by using your rewards card right.

Keeping Track of Points

Benefits and rewards are mostly allocated through rewards points, which you’ll rack up by using your card through specific ways. Make sure that you keep track of the points you earn so that you know what to do with them when the time comes.

Check the Expiry

Benefits and points don’t last forever, and if you wait for too long to make use of the benefits of your card, then your points will expire – and if you haven’t been keeping track, you’ll only find this out when it’s too late.

One Card, Not Several

When you’re making use of several cards at once, it’s easy to lose track of your spending or to lose your benefits on some of the cards that you aren’t using as often – and then they’re just costing you more money than they’re worth. Ditch these cards, and put all of your purchases through one or two better cards instead.

Benefits Count

Sometimes it pays to align your spending with the benefits of your individual card. For example, if Shop A pays you 50 points per purchase and Shop B only pays you 10, it could make more sense to start doing your grocery shopping at A instead – just for the credit card benefit. They all add up, and you’d be surprised how soon your savings get to $1, 000.

Paying Your Card

Pay your card on time – always. This can save you from racking up all sorts of costs and liabilities, and it’s the single key to making sure your credit card remains a tool for your financial betterment instead of something that you should financially fear.

Not sure? Take a look at this list of the best rewards credit cards if you’d like to know more about selecting the right card for your needs.

A few things you should know about me: I'm a wife and mother of 6, as well as a full-time work-at-home mom, a passionate entrepreneur, a homeschooler, and an INTJ, with a heavy emphasis on the introvert! And I'm pretty sure fair-trade chocolate, loose leaf tea, and Starbucks lattes are among life's greatest pleasures.